Some readers have written me interested in a breakdown of my expenses. I thought it would be an interesting exercise and it would give a big picture of where we spend our money.

Our expenses include (on an annual basis):

Housing Expenses: $24,500

  • Mortgage: $14,300
  • Property tax: $3,000
  • Maintenance/Furnishings/Upgrades: $3,600
  • Utilities: $3,600

Car Expenses: $6,280

  • Car payment: $0
  • Gasoline: $3,600
  • Maintenance: $2,400
  • Registration: $280

Home Essentials: $2,010

  • TV/Internet/Landline phone: $1,440
  • Cell phones: $570

Food and Booze: $7,800

  • Groceries: $6,000
  • Entertaining/Eating Out: $1,800

Insurance: $3,590

  • Home: $460
  • Automobile (for 2): $1,750
  • Life: $420
  • Disability insurance: $960

Spending: $3,600

  • Personal spending/shopping: $3,600

Other Expenses: $3,200

  • Charity: $2,000
  • Gifts: $1,200

Total Annual Expense: $50,980

Note that the above expenses are mostly recurring bills and do not include retirement contributions or one time items like a new TV for example. I can’t say that I’m surprised that my housing costs are high relative to other expenses, but it’s an eye opener to see that it’s almost 50% of my total annual outlay.

How do your expenses stack up? Are your housing costs also a large portion of your total annual outlay?


  1. Avon Blake on September 3, 2008 at 8:25 am

    That seems a very low price to pay for your mortgage. Do you live in a tiny house in a rough area or do you just have a small mortgage?

  2. Chuck on September 3, 2008 at 8:37 am

    In our case, housing is our largest expense as expected. However daycare used to be almost as much as the mortage. Our eldest just started grade one, so her daycare cost has just been cut in half.

  3. PhilC on September 3, 2008 at 9:02 am

    You could add income tax, it would make your mortgage look almost reasonable. My income tax comes in at 37% while the mortgage is 32% of pre-tax income.

  4. FrugalTrader on September 3, 2008 at 9:11 am

    Avon, LOL, the opposite actually. We recently built our house at the cost of $275k in a great location. The reason why our mortgage is small is due to a large down payment from the sale of our old house ($60k) and the rest cash savings.

    Chuck, yes, I expect daycare to be quite expensive when the time comes. How much is daycare where you live?

    PhilC, great idea, I never thought of adding income tax as an expense.

  5. moneygardener on September 3, 2008 at 9:45 am

    My breakdown would be similar except my housing costs come in lower than yours, but I would imgaine they’d be a similar proportion of total expenses.

  6. Chris L on September 3, 2008 at 9:50 am

    It surely proves how frugal you are :)

  7. Chris L on September 3, 2008 at 9:54 am

    I also should point out how odd our spending balances are in the current time. Such a small portion of expenses are directly life related i.e. food. A good book to read is “walden’s pond’. It’s a classic when it comes to the basics of life. If you haven’t read it, give it a shot. It really helps put everything into perspective.

  8. Mike on September 3, 2008 at 9:56 am

    I think to get the ‘true’ picture you would have to start with 100% of you income and then dedecut everything. This would include tax and retirement savings. Breaking it down this way would give you a clear idea of how much you were saving, what your real tax rate is etc.

  9. FrugalTrader on September 3, 2008 at 10:14 am

    One thing I forgot to include is baby expenses!

    ChrisL, food is one area that we are definitely not frugal on. $500/month in groceries for 2 people seems like quite a bit compared to most people that i know.

  10. Chris L on September 3, 2008 at 10:27 am

    You are right food is high relatively speaking. But if you break it down 15% of expenses to keep you alive is small in comparison to 85% for non-life-sustaining expenses. Of course housing is high and necessary in the winter to keep you warm and sheltered however, if we look at in a historical perspective it is huge. A house would take one person 6 months to build if they harvested all the materials from the surrounding land. They would build very small, only what they needed…and then that expense would be taken care of. Very little cost would be associated, it would be all sweat equity. Now we farm out all the work and so pay for it 25 years (or less hopefully) and build much larger then what is actually needed (not wanted). It’s an interesting way to look at things….I mean if you break it down time wise, it means that you spend 15% of your time working for food and 85% of the time working for something else. Food is really the only thing you truly need aside from shelter when it’s cold. A truly frugal person is someone that lives on the street with only the clothes on their backs…. and they have all the time in the world. Extreme, yes and not how we want to live, but what do we give up for our “quality of life”? Can you balance our lives to meet our needs and wants and still have the time to enjoy it all?

  11. Nerd Money on September 3, 2008 at 11:08 am

    I love lists like this! I’m intrigued by the costs associated with owning a house. Utilities seem higher than I would have expected, but then again I’ve never paid the bills for a house myself. I assume that utilities include electricity, water/sewage, and heating (gas, oil, etc.) Would you say that an average of $300/month is a typical cost of utilities for a house in Canada?

  12. Dividend Growth Investor on September 3, 2008 at 11:14 am


    Once you pay off your mortgage, you will need “only” $36,000 /year to live on ( that is 2008 dollars).
    In addition to that is it wise to keep a landline and a cell phone? even if your internet comes through a landline I am sure you could find a deal where it’s not bundled together..
    I also realize why your goal is to have $1,000,000. If you can generate an annual dividend income of at least $40,000 ( very feasible from a one million dollar portfolio) you will be financially independent.

  13. Al on September 3, 2008 at 11:15 am

    Hi FT,

    1 question and 1 thought.

    Do you not have homeowner’s insurance?

    It would be fair to only consider the interest portion of the mortgage as an expense. The principal portion goes towards reducing a liability.

  14. FrugalTrader on September 3, 2008 at 11:15 am

    Nerd Money, the utilities really depends on the size of the house, the climate where you live, and the type of heating/air conditioning that’s installed. For us, NL has a long cold winter and we use electric baseboard heat which isn’t the most efficient. A friend of mine has a house that’s 20% bigger than mine but pays the same in utilities because he has a heat pump installed.

  15. FrugalTrader on September 3, 2008 at 11:24 am

    DGI, good “call” on the landline and cell phone. Ideally, I would use the cell phone all the time. However, our current home alarm system requires that a land line be installed.

    Al, our homeowners insurance is listed under “fire insurance”. I will change that to home insurance as our coverage is more than fire. That’s an interesting thought about the mortgage payments, I never thought about counting only the interest.

  16. Chuck on September 3, 2008 at 11:31 am

    Here in Mississauga we pay $125/wk for our 2 yr old in a home daycare setting (cash price no tax receipts).

    Our 6 year old was $195/wk in a daycare near her school, which includes transport to/from school. Since she’s now full days its dropped to $95/wk.

    We have friends in Toronto paying over $300/week.

    As to the question about considering only mortgae interest as an expense. Would you consider this statement as cash flow, or profit and loss. It looks more like cash flow to me. Though we’re splitting hairs here.

  17. Four Pillars on September 3, 2008 at 11:48 am

    One point about keeping the landline – if you have a young child then you might not want to rely on a cell phone in case of emergency. For all the complaints about Bell etc – landlines are very reliable compared to cell phones (especially if you can’t find the cell phone or the battery is dead).


  18. Avon Blake on September 3, 2008 at 12:03 pm

    Cool. I had hoped that was the case!

  19. FrugalTrader on September 3, 2008 at 1:08 pm

    Chuck, thanks for the numbers. It seems that daycare can be a very significant expense!

    FP, great point about the landline and emergencies. I never thought of that.

  20. James on September 3, 2008 at 1:08 pm

    Re: Childcare, we are in Ottawa and it is a provider’s market with long waiting lists

    At home care ranges from $ 32- $ 40 per day pretty much regardless of age, but there are very few that take 12 – 18 month olds as there are strict provinical limits on the number of children under care.

    Institutional daycares vary as well, but are more expensive. Our daycare is at the higher end

    12 – 18 Months = $57 / day
    18 – 30 Months = $49 / day
    30 Months + = $40 / day

    You pay 5 days a week, 52 wks per year (you pay for holidays, sick days, etc).

    As for child expenses, I found that consumables (diapers, vitamins, formula – not breastfeeding) worked out to be about $14 / day for the first year. Dropping off quickly after that. By 2, each kid is only about a 20% adder to the avg adult costs.

    Where are your non-perishable consumables recorded, in groceries? (i.e. paper products, cleaning supplies, personal care products, etc). If they are in groceries, I am surprised that $500 / month covers it, even for 2 people. We have a 3 year old, eat a well balanced diet, and spend $1300 / month on those items, food, and eating out.

    Also with kids, clothing expenses are high, even if you get lots of donated/discounted items. RESPs are after tax, so I consider them expenses. Then there are endless classes and groups to join. It isn’t cheap. If you get away with $200 / month on top of the $14 / day, you are doing VERY well.

  21. Al on September 3, 2008 at 1:50 pm


    As Chuck figured out I was going with a balance sheet/ income statement approach with suggesting only counting interest for the mortgage. If you’re doing a cash flow statement, then including the full mortgage payment makes sense, but then you should also include other debt payments (commercial mortgage, HELOC, etc) and money spent on investments, both registered and non-registered.


    I’m in Ottawa as well with two young children. Pleeease tell me you’re inflating those numbers.

  22. guinness416 on September 3, 2008 at 3:00 pm

    Landlines are cheap anyway if “bundled” into internet access or something. And it’s always convenient for people to have another place to leave messages – I’d go mad if my cellphone rang every time the library had something to pick up or blockbuster wanted their returns. It’s not something I’d chop unless I really had to.

    Ugh, childcare is expensive! Anyone read the recent articles about google’s changes to their on-site childcare provisions in CA? We have an acquaintance out there going nuts over it, although he can afford it.

  23. mjw2005 on September 3, 2008 at 4:36 pm

    Amazing how non Mortgage housing expenses eat up over $10,000 a year….living mortage free can still be expensive…but I guess better than paying rent if you can pay your mortgage of quickly and not pay to much interest….

    Car insurance seems really good for two people…..

    Great blog post…very interesting…

  24. Terry on September 3, 2008 at 4:46 pm

    I’m surprised that you do not budget for vehicle replacement so that you can pay cash when needed. In my experience, replacement costs run around the same as gas and maintenance combined, over the life of a vehicle (and I plan on running a vehicle to 250,000 kms).

  25. Ramona on September 3, 2008 at 4:51 pm

    I guess clothing, hair cuts, books, all accounted for in miscellaneous? I’m reading all the posts about childcare, and yes it is mega expensive. HOWEVER! when your child no longer needs child care, he/she has lots more expenses – clothing (we do not buy from zellers/bay/etc), electronics!!, courses, equipment. From a financial viewpoint my 15 year old makes me very glad I only have one child. And then there’s next year when he will need driver’s ed, then car insurance, then university. FT don’t count on those “child” costs decreasing until your kids are about 22 (with luck!)
    But make sure to hug & love them everyday, no matter what the damn cost…..

  26. Finance_Addict on September 3, 2008 at 6:02 pm

    FT great post! It’s always good to compare. It’s kind of scary when one needs 50K after tax dollars to live comfortably. If someone is out of work for too long things can get ugly pretty quick. I found your car expenses really high. I came in at roughly half that. I’m also guessing you may be to low on the Home Furnishing total. Blinds\Shutters alone on a new home can come in or over 3K. I’m also assuming all the totals where on a household including your wife? Either way, pretty typical and close to what I have and I’m a similar demo (early 30’s, wife and now 2 kids, same profession.) Cutting and controlling the expense side of the equation obviously very important.

  27. Dividend Growth Investor on September 3, 2008 at 7:27 pm

    So FT, can we expect a breakdown of your revenues as well so that we can do some comparison and tell you what to do with your life :-)

    One cheaper alternative to daycare is if Ft’s parents are retired and decide to keep their legacy by taking care of the granddaughter/son. That’s what my parent’s did to me and I turned out ok..I think..

  28. DAvid on September 3, 2008 at 9:53 pm

    I took the time a few months ago to track all our spending. I found lots of cash being spent on items outside the categories you have listed. This month it’s the TV, next month the HD box, then winter tires, a weekend vacation getaway, etc. These items quickly add to your expenses, but are not accounted above.

    I’m not suggesting keeping a tight budget record, as it takes a lot of time, just that there are a LOT of expenses we have which we do not record, and then forget about.

    The real test is income – savings = expenses!


  29. FrugalTrader on September 4, 2008 at 12:38 am

    Guys, you are all correct about some expenses that i’m missing. A lot of expenses like big furniture etc, I consider one time expenses, and the list above is all about recurring expenses. With regards to the replacement cost of a vehicle, that will come out of my cash savings when the time comes.

  30. Sam on September 4, 2008 at 4:40 am

    “How do your expenses stack up? Are your housing costs also a large portion of your total annual outlay?”

    In my case, its not. We rent a big house here in the Philippines (as we don’t expect to live here for life) and so its not a huge expense for us. We probably spend more money on grocery (foods) and 2nd only the monthly rent payment. However, I do expect too that our expense might also be biggest on mortgage once we start living on our own.

  31. cannon_fodder on September 4, 2008 at 1:44 pm


    Our 3 biggest expenses by far are the mortgage (aggressively paying that down), RRSP/RESP contributions and child support payments. In after tax terms, they total about $65k. Hopefully we’ll be able to find some money to take full advantage of the TFSA program.

    Next year we might have to replace one vehicle – we’ve enjoyed over 6 years without car payments. That will be an unwelcome change – the car payments that is, not the newer car!

    It was 2 years ago when we finally purchased the last bit of furniture for our house so we don’t expect any major household purchases for a long time.

    I use Vbuzzer for a ‘landline’ phone. It is a VOIP service that gives me a 416 area code number to be able to dial and receive calls (our cell phone numbers changed too often and this makes it easier to have a constant number). It costs just over $5 per month and the quality is excellent (I did get a hardware device to help with the quality – it cost me $10.)

    Since we go on vacation each year, that to us is also a recurring expense. I’d say that it runs anywhere from $2,500 to $6,000 per year.

    Our gifts expenses are significantly higher. Two teenagers and parents that live far away (thus causing us to buy them airline tickets so they will come and visit us) probably mean we are closer to $3,000 per year.

    Other than that we are pretty much in line with what you have.

  32. Mr.Archanfel on September 5, 2008 at 12:49 pm

    You didn’t include taxes, which seems to be the biggest expense for me. Including CPP and EI, it accounts for about 65% of my total expense so far this year. And that does not even include sales and investment taxes. :(

  33. James on September 5, 2008 at 5:56 pm


    Sorry, not inflating the numbers. I am in Stittsville. The west end is flooded with dual income, young families. There are lots of home daycares, some good, I am sure, but the waiting lists for “institutional” daycares is very long and the high demand is setting the prices. I would say we are in the top quartile of costs as our daycare is a “low ratio” daycare with services above and beyond those I’d expect from the “budget” centers (… like weekly field trips to the library, park days, and organized concerts, etc).

    We interviewed 8 home daycares with openings for a 12 month old and rates were $32 – $40 / day, but I found many of them lacking the types of tools needed to give my daughter the experience I was looking for. To top that off, I was unimpressed with the 2-3 wks paid vacation (not a problem with $, more that they would be dictating when my vacation would be) and the ever looming threat of an 8am cancellation due to illness.

    Unfortunately with #2 on the way, I see some belt tightening occuring for the next couple of years.

  34. Marcia on September 7, 2008 at 9:34 pm

    Boy, I have to say that I see the disadvantage to living in So. Cal. I really enjoyed looking at your list. I am inspired to make my own soon.

    But our housing costs (mortgage, taxes, insurance only) are more than your entire annual expenses. Which is about 30% of our total income.

  35. MultifolDream$ on September 8, 2008 at 11:01 pm

    Reading all this discussion about daycares I can only feel lucky living in Montreal where I pay $7 a day.

    The car maintenance look a little bit high for me, but perhaps you have new car.

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